Lender in Focus 3.4: PaydayUK APR

PaydayUK APR

PaydayUK APR

PaydayUK APR is a good place to start to differentiate their interest rates from other lenders.

When you are choosing a lender to provide you with short term or instalment loan products, it is important to understand how their repayments work. You should also compare their APR with other loan providers, so you can ensure that you are getting the best deal for you.

CashLady takes a look at PaydayUK APR and their repayment schedule for their short term instalment loans.

Payment schedule

When you apply for a loan with PaydayUK, you can choose how long you want your loan term to be. You are able to select the number of repayments you want to make from 1 to 12.

If you want to borrow less than £500, you will only be able to opt for a maximum of 6 repayments. For a loan of £500 or more, you can choose up to 12 repayments.

If you elect to make one single repayment, PaydayUK will ask you to provide them with your next payday. You will then only be charged interest up until your next payday. This is when your loan will be due to be repaid.

How are repayments taken?

PaydayUK will take repayments for short term loans automatically from your debit card. You will need to provide your debit card details when you apply for a loan.

How much will my repayments be?

Your repayments will be calculated by working out how much you borrow, how much your interest is and how many repayments you would like to make.

Will I be charged less if I repay my loan early?

Yes. Your interest is charged daily, so if you want to repay your loan early, you will only pay the interest on the number of days you have had the loan for.

Can I change my repayment date after I have taken out a loan with PaydayUK?

If you want to change your repayment date, you should call PaydayUK on 0330 024 1642 to discuss your options.

What happens if I cannot afford to pay back my loan with PaydayUK?

What is the APR of PaydayUK?

Sometimes your personal and financial circumstances can change. If this happens and you think you may struggle to make your repayment schedule, you must inform PaydayUK as soon as possible. You can discuss your payment options with PaydayUK by calling them on 0330 024 1642.

You should also consider obtaining free, impartial debt advice. For example, you could contact Citizens Advice, National Debtline or Step Change.

Table of borrowing

In the table below, you can see some examples of what you could expect to pay back with PaydayUK.

PaydayUK table of borrowing

What is PaydayUK’s APR?

APR is the acronym for Annual Percentage Rate.

Looking at the PaydayUK APR can help you to compare their interest rates with other lenders.

PaydayUK’s representative APR is 1169%.

Not all successful applicants will get this advertised APR.

When it comes to short-term loans, the APR can be quite confusing. Because short term loans are, by their very nature, short, the APR can seem quite large.

If you want to know how much you will be expected to repay over your loan term, many lenders have calculators on their websites. These will enable you to do this. Once your loan has been approved, you should also get a full breakdown of your repayment schedule. Including the total amount you will have to repay.

How does PaydayUK’s APR compare to other lenders?

So you can compare the PaydayUK APR with that of other lenders, CashLady has picked a few short term lenders at random:

Wonga

Wonga has a representative APR of 1509%.

For example: If you took out a loan of £100 for a period of 13 days, you could expect to pay £10.40 in interest. In this example, you would pay back a total of £110.40

SafetyNet Credit

SafetyNet Credit has a representative APR of 68.7% (capped at 40 days).

0.8% interest is charged per day on your loan for up to 40 days. This means you will be charged 80p per £100 deposited per day.

For example: If you borrowed £100 for 31 days, you would be charged 80p interest per day and the total interest would be £24.80. In this example, you would pay back a total of £124.80.

SafetyNet Credit offers an alternative to a more traditional payday loan by providing you with a credit limit (up to £500).

Payday express

Payday express has a representative APR of 1149%.

For example: If you took out a loan of £300 borrowed for a period of 3 months. Total amount repayable is £450.09 in 3 monthly instalments of £150.03.

PaydayUK  APR daily cap

PaydayUK’s daily rates range from 0.36% to 0.8%. This means you will pay between 36p and 80p per day, per £100 borrowed.

The FCA’s rules on high-cost short-term credit state that interest and fees charged must not exceed 0.8% per day of the amount you borrow.

Total loan value repayment cap

All firms that are authorised and regulated by the FCA, including PaydayUK, must meet the following criteria:

•   Fees and interest must not exceed 0.8% of the amount borrowed, per day

•   Default fees must not exceed £15, although interest can still be charged after default (but not above the initial rate)

•   Borrowers can never pay more in interest and fees than 100% of the total amount they borrowed.

This means that you should never pay back more than 100% of the amount you borrowed from PaydayUK.